Freislinger v. Emro Propane Co.

• Decision Date: 19 December 1996
• Docket Number: No. 95-2350,95-2350
• Parties: Prod.Liab.Rep. (CCH) P 14,781 Alan FREISLINGER, Plaintiff-Appellee, v. EMRO PROPANE COMPANY and Marathon Oil Company, Defendants-Third Party Plaintiffs-Appellants, v. WEST SALEM KNOX COUNTY HATCHERY, INC., doing business as George's Farm Supply, Third Party Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1412

99 F.3d 1412

Prod.Liab.Rep. (CCH) P 14,781

Alan FREISLINGER, Plaintiff-Appellee, v. EMRO PROPANE COMPANY and Marathon Oil Company, Defendants-Third Party Plaintiffs-Appellants, v. WEST SALEM KNOX COUNTY HATCHERY, INC., doing business as

George's Farm Supply, Third Party Defendant-Appellee.

No. 95-2350.

United States Court of Appeals, Seventh Circuit.

Argued April 11, 1996.

Decided Nov. 6, 1996.

Rehearing Denied Dec. 19, 1996.

Robert L. Douglas, Robinson, IL, Rex Carr (argued), Michael Barry Marker, Carr, Korein, Tillery, Kunin, Montroy & Glass, East St. Louis, IL, for Plaintiff-Appellee.

Constantine L. Trela (argued), Michael W. Davis, Sidley & Austin, Chicago, IL, John Ewart, Jonathan L. Kazense, Beverly J. Mack, Craig & Craig, Mattoon, IL, for Defendants-Appellants.

Bradley K. Bleyer, Marion, IL (argued), for West Salem Knox County Hatchery, Incorporated.

Before FLAUM, EASTERBROOK and DIANE P. WOOD, Circuit Judges.

DIANE P. WOOD, Circuit Judge.

On November 15, 1990, Alan Freislinger began his day at work for West Salem Knox County Hatchery (known as George's Farm Supply or George's) as he usually did by attempting to light the pilot light of a dehydrator machine. To his horror, the propane gas exploded violently, engulfing him in flames and leaving him severely burned. Freislinger sued the companies that had supplied the propane, that owned the tank in which it was stored, that manufactured the propane, and (initially) that supplied the chemical odorant added to the gas. Several of the defendants brought indemnification or contribution actions against George's. After a trial before the magistrate judge, to which the parties stipulated, the jury awarded Freislinger damages of $3,847,000 and the court dismissed the third-party claims against George's. The court then denied the defendants' post-trial motion for judgment as a matter of law and ordered a modest remittitur, bringing the award down to $3,388,277.81. Before this Court, Emro and Marathon argue that the instructions to the jury misstated the relevance of Freislinger's own negligence or assumption of risk, and also that the district court erred in granting judgment as a matter of law on Emro's third-party indemnification claim against George's. We agree that Illinois law requires reversal on both points.

I

Freislinger went to work for George's in 1984. Beginning in 1988, he was assigned to operate a device that cut and dried wood chips for truck oil filters. The machine caused the wood chips, which George's acquired from a local lumber mill, to travel on a conveyor belt into a dehydrator. After the chips were dried, they were blown into a rotating saw, which cut them down to a size suitable for use in the filters. The dehydrator had been modified on a number of occasions before Freislinger's accident. It had initially been designed to dry grain and to operate on fuel oil, but the prior owner had modified it to run on natural gas. When George's bought it in 1980, they modified it to work with the wood chips. Later, George's modified the fueling system again, so that it would run on propane instead of a mixture of natural gas and field gas. A company called Blue Flame Gas performed the latter work for George's.

Rather than buy a propane tank, George's decided to lease one from Blue Flame. In the lease with Blue Flame, which Emro later took over when it bought out Blue Flame's operations, George's agreed

[t]o protect, indemnify and hold the Lessor harmless from and against any and all claims, demands, suits and liability for damages to any person or persons connected with or arising out of the use of said storage tank or with the use of propane gas, save and except those arising out of or resulting in the failure of the Lessor to properly repair such tank, or any mechanical defect therein, after receiving notice from the Lessee of such mechanical defect or defective condition.

Blue Flame installed the leased tank on George's property. A twenty-five foot pipe connected the tank to the dehydrator, and a master valve on top of the tank controlled the gas flow. The entire contraption, which was inside a shed, also had two more valves: one to control the flow of the gas to the pilot light and the other to control the flow of the gas to the main burner. In order to make the machine work, the operator had to open all three valves, set the flow of gas to the main burner, and light the pilot.

On the day of the accident, Freislinger walked through the shed and started up the various components of the wood chipper. As he walked through the building, he passed the dehydrator and checked the two interior valves to make sure they were in the "off" position. He then walked to the storage tank and opened the main valve. Returning to the shed, he opened the pilot valve and attempted to light it with a match. This effort failed, so he tried again. The second time, when he drew the match near the pilot, catastrophe struck. Not only did the gas ignite, but the lit gas cascaded from the pilot, in Freislinger's words, "like a waterfall." The burning gas in turn ignited a pool of propane that had gathered at his feet. Freislinger screamed and tumbled into the inferno of burning gas, before he managed to roll out of the pool of fire and run from the shed in flames.

Testimony at the trial indicated that the valves and pipes associated with this jury-rigged system leaked regularly, and that both the employees of George's (including Freislinger) and its owners were aware of these problems. The pilot valve handle had broken off and had been replaced with a handy pair of vise-grip pliers left attached to the valve assembly. Gas leaking from the pilot valve would, from time to time, catch fire. George's employees tried to remedy these problems by tightening the propane tank valve with a wrench and applying duct tape to the pipe leading to the pilot light assembly. Every night, they closed the tank valve to prevent propane from escaping into the shed through the various leaks in the pipes and valves, although testimony indicated that this measure was normally unnecessary for operators of propane tanks. Some of the employees testified that they cleared the air out of the shed in the morning with a fan before attempting to light the pilot, in order to remove possible accumulations of gas. There was also testimony that if the pilot did not light on the first try, employees would air out the shed before trying again. Freislinger did not take these extra precautions, either as a matter of course or on the morning of November 15, 1990. Other evidence indicated that operation of the blower motor could cause electric sparks, which plainly posed a different risk of fire.

II

In July 1992, Freislinger brought this diversity action against Emro Propane Company, the supplier of the gas and owner of the tank, Marathon Oil Company, Emro's indirect parent and the manufacturer of the propane, and Phillips Petroleum Company, the supplier of a chemical odorant added to the propane. As noted above, Emro and Marathon then both brought third-party contribution claims against George's, and Emro also brought an indemnity action based on the language in the lease agreement. In January 1993, Freislinger settled his worker's compensation claims against George's, and the court found that this qualified as a good faith settlement for purposes of the Illinois Joint Tortfeasor Contribution Act, 740 ILCS 100/0.01 et seq. As a result, the court also dismissed Emro's and Marathon's contribution claims against George's. See Halleck v. Coastal Building Maintenance Co., 269 Ill.App.3d 887, 899, 207 Ill.Dec. 387, 397, 647 N.E.2d 618, 628 (1995) (defendants who settle in good faith with plaintiff may not be sued by joint tortfeasors for contribution); 740 ILCS 100/2(d). Emro's indemnification claim survived longer, but the court awarded George's summary judgment on that claim on the fifth day of trial. In January 1994, Freislinger reached a settlement with Phillips, and it too was dismissed from the case.

This left Freislinger's claims against Emro and Marathon, as they appeared in his fourth amended complaint. Count I alleged a strict product liability claim against Emro, asserting that the valve on top of the propane tank was "unsafe and insecure" and allowed "inadequately odorized gas" to enter the system. Count II was a negligence claim against Emro, on the ground that the propane Emro sold, which was odorized with ethyl mercaptan, was dangerous insofar as it was heavier than air, the odor dissipated after a time, and the odor could be masked by other odors. In addition, it claimed that Emro had breached its duty to warn Freislinger, the ultimate consumer, of these dangerous properties. Last, Count II claimed that Emro was negligent in selling propane to a facility that did not comply with state safety regulations set forth in 41 Ill.Admin.Code § 200.90, and 430 ILCS 5/2 (formerly 96 1/2 ILCS § 5602). Count III alleged the first two negligence theories of Count II against Marathon, and Count IV was a strict products liability claim against Marathon for inadequately odorizing the gas.

The centerpiece of the defense was the claim that Freislinger was responsible for the accident, either through assumption of risk or contributory negligence. With respect to assumption of risk, the defendants introduced evidence tending to show a variety of specific failings: (1) Freislinger was aware of longstanding and continuous leaks at the valve on the propane tank, (2) he knew that if the valve was not completely closed, gas could accumulate in the shed, (3) he knew from the leak that the valve was defective, yet he did not cut off the flow of gas after his first effort to light the pilot failed, (4) he also did not purge the shed of gas after the unsuccessful first try, (5) he knew in a variety of ways that accumulated propane was dangerous, and (6) the propane could have been smelled from 50 yards...